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Centre Cuts Health Budget as COVID-19 Toll Nears 5 Lakh

The allocation as a proportion of the total expenditure in nominal terms has dipped from 2.35% in 2021-22 (RE) to 2.26% in 2022-23 (BE).
Health budget

The Union Budget 2022-23 has dashed the expectations of a decent allocation to the health sector following the lakhs of death during the second wave of the pandemic last year. Despite the COVID-19 official death toll nearing 5 lakh, the health budget 2022-23 (BE) has declined by 7% over last year’s revised estimates in real terms while accounting for the price rise. 

The Centre has reduced the health budget as a proportion of the total expenditure in nominal terms from 2.35% in 2021-22 (RE) to 2.26% in 2022-23 (BE). This is, in fact, even lower than the health expenditure as a proportion of the total expenditure incurred in 2020-21 (2.46%) 

Declining Health Expenditure as % of GDP

At the beginning of the pandemic in March 2020, the Parliamentary Standing Committee Report had noted that the Centre should allocate about Rs 2 lakh crore in 2022-23 to meet the target of 2.5% of GDP by 2025. Shockingly, the current allocation is less than half of that.

Compared to 2020-21 (Actuals), the health budget as a proportion of the GDP has declined. Such a decline is significant as COVID-19 continues to wreak havoc.

Health Budget GDP

Decline in National Health Mission

The National Health Mission (NHM) has been one of the most important centrally sponsored schemes for intervention in reproductive and child health care and other components of primary health care in rural and urban areas. 

During the pandemic, primary health care services were especially affected. With the closing down of schools and Anganwadis during the lockdowns, the health and nutrition of women and children were adversely impacted. The drastic situation demanded increased expenditure on NHM and other related programmes. However, NHM allocations since 2020-21 have witnessed a decline.

Allocation on health in budget

In fact, NHM allocations under the Narendra Modi government have taken a serious hit. In 2014-15, when Modi took charge, the NHM allocation as a proportion of the total health budget was 61%. In 2022-23, the proportion has gone down to 41%.

“Given the crumbling health system and the severe crisis we faced during the pandemic, there is a global consensus that public expenditure on health needs to increase. This decline in the allocation is unfortunate and condemnable,” Indranil, Mukhopadhyay health economist, O.P. Jindal Global University, told Newsclick.

Decline in Health Research

When there is a clear need to invest more in health research, the allocation for the department of health research has only marginally increased from Rs 2,663 crore in 2021-22 (BE) to Rs 3,200 crore in 2022-23 (BE). As a proportion of the total health budget, the allocation for the health research department declined from 3.8% in 2020-21 (Actual) to 3.6% in 2022-23.

While the pandemic underlined the importance of crucial investment in health research, the reduction in the allocation speaks volumes of the government’s priorities.  Surprisingly, the allocation for the Indian Council for Medical Research, which has played a leading role during the pandemic, has been reduced from Rs 2,358 crore in 2021-22 (BE) to Rs 2,198 crore—accounting for the price rise, it is a decline of 17%. 

Which Components have got attention?

Noticeably, projects of the Centre which are likely to involve the private sector heavily have received considerable attention, including the pet projects of the Modi government such as the controversial National Digital Health Mission (NDHM). The allocation for NDHM has been increased from a meagre Rs 30 crore in 2021-22 (BE) to Rs 200 crore in 2022-23 (BE)—a whopping 567% jump.

Similarly, the component ‘Establishment of New Medical Colleges and Increase of Seats in existing Government Medical Colleges’ has seen a substantial increase from Rs 4,800 crore in 2021-22 to Rs 7,500 crore in 2022-23.

The 2021 Prime Minister Ayushman Bharat Health Infrastructure Mission, which includes some existing programmes such as the allocation for rural and urban health and wellness centres and strengthening the surveillance of infectious diseases, which were earlier reported separately, has also received a major boost with the allocation increasing by 462% in 2022-23 compared to 2021-22 (RE).

India has been witnessing a severe crisis since 2020-21 with the public health system under extreme pressure while private hospitals profiteering during the pandemic. The Modi government has rather chosen to turn a blind eye to the problem.

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